When it comes to fulfillment performance, order accuracy is one of the 10 most important KPIs you can check out. Whether you’re talking about order accuracy or shipping accuracy, if a company can’t keep up with these two elements, they risk losing customers and their reputation.
But how important is order accuracy in overall fulfillment performance? In this blog post, we’ll take a look at the importance of order accuracy and what businesses can do to ensure that their orders are accurate every time.
We’ll also explore the consequences of inaccurate orders and how businesses can avoid them.
Among fulfillment KPIs, order accuracy is a measure of how accurately an order is fulfilled. It takes into account whether the customer received what they ordered, if it was delivered on time, and if there were any discrepancies between the order and the items received.
Order accuracy helps companies ensure that their customers are satisfied with the service they receive and can also help them identify any areas where improvement is needed. Mathematically, order accuracy is denoted as the (%) percentage of orders that are filled correctly.
This metric is important because it directly impacts a company’s bottom line. Inaccurate orders can cost a company money in terms of lost inventory, missed sales, and unhappy customers, which means it’s important to improve your order fulfillment process.
Order accuracy is calculated at a stage when all operations involved in fulfillment are carried out and since it’s an average, it can provide critical insights for your business’ overall performance. After all, every other effort of a brand is useless if their products aren’t being delivered to customers on time.
If an order is placed for an item that is not in stock, it will have to be fulfilled from another location, which can cause delays. This delay can result in severe customer dissatisfaction if not utter loss.
The frustration grows even further if an order is placed for an incorrect item and the customer has to return the item and wait for the correct item to be delivered. Needless to say, no brand can take hits like these and hope to sustain in an ever-competitive market.
Order accuracy might be one of the most important reasons why businesses care about fulfillment SLAs (Service Level Agreements) in general. For an FC, this metric serves as testament to their performance as an organization.
It’s no secret that fulfilling orders accurately is critical to the success of any ecommerce business. Unfortunately, even the most well-run warehouses can make mistakes. In fact, a recent study by Forrester found that one in four online orders is incorrect.
That’s why it’s so important to have systems and processes in place to ensure order accuracy.
Here are a few tips:
Data is your friend when it comes to improving order accuracy. By tracking past errors, you can identify patterns and make changes to your processes accordingly.
You should also track key metrics such as error rate, order volume, and turnaround time to spot trends and potential problems early on. The best way to go about tracking fulfillment KPIs is through Capabl, a tool designed specifically to measure SLA performance.
Your team is crucial to ensuring accurate orders. Make sure they understand the importance of accuracy and involve them in process improvements. Encourage them to report errors and near-misses so you can address issues quickly.
Automation can help reduce errors by taking some of the manual work out of the equation. For example, consider investing in an order management system that integrates with your warehouse management system (WMS) or using barcoding or RFID for tracking inventory.
Even if you have solid processes in place, things can change over time – new products are introduced, seasonal fluctuations occur, etc. This means you should always be on the lookout for new and updated systems. Better tools only make the work more seamless.
An organization must have clear and concise product descriptions. This will help ensure that FC employees pick the correct items when fulfilling an order.
Different color schemes, prominent labeling differences and other designing/packaging elements can be changed to distinguish between similar products.
There are a few key things you can do to ensure peak order accuracy in your fulfillment performance:
1. Make sure your inventory management system is up-to-date and accurate. This is the foundation for everything else that follows in fulfillment supply chain, so it’s important to get this right. Your FC can integrate with your order and inventory management systems to have synchronized data available to both parties.
2. Put processes and checks in place to ensure that orders are picked, packed and shipped correctly. This might include processes like double-checking orders before they go out, or using barcodes or other tracking methods.
3. Train your employees thoroughly on all aspects of the fulfillment process, so that everyone knows exactly what they need to do and how to do it. If you’re a brand, ask your FC to help with this.
4. Monitor your performance. If you’re a brand or an FC looking to achieve transparency, it’s essential that you use a neutral third-party app to have an unbiased evaluation regularly. With tools like Capabl, you can gauge SLA performance as needed to keep things running smoothly.
This could involve things like implementing new technology or making changes to your processes.
To get closer to your definition of perfect order fulfillment, you’ll need to optimize your order accuracy and streamline fulfillment performance. When in doubt, it’s always recommended to have experts conduct a fulfillment audit and see what’s working and what’s not.
Ideally, you want the highest level of order accuracy in order to ensure you attain and retain new customers and to do that, you’ll have to make decisions to enhance your fulfillment operations. And that’s where we can help. Feel free to get in touch with us!